On December 20, 2019, the UFCW & Employers Benefit Trust (“UEBT”), on behalf of the certified class of California self-funded payors, and the People of the State of California, filed for preliminary approval of a historic, eve-of-trial settlement providing $575 million and strong injunctive relief in their antitrust action against Sutter Health and certain affiliates.  The motion for preliminary approval is available here.

A preliminary approval hearing is scheduled for April 6, 2020 in the Superior Court of California in San Francisco.

Case Background

On April 7, 2014, Cohen Milstein and its co-counsel, on behalf of UFCW & Employers Benefit Trust (UBET), one of the largest union benefit trusts in California, and a class of California self-funded payers, filed an antitrust class action lawsuit against Sutter Health for violations of California’s Cartwright Act and Unfair Competition Law.

Plaintiffs allege that the unusually high cost of healthcare in Northern California is largely attributable to the alleged anticompetitive conduct of Sutter Health, and that such conduct has substantially inflated Sutter’s prices.

Specifically, the plaintiffs allege that since 2002 Sutter Health used anticompetitive contract terms and contracting practices with insurance companies to insulate itself from price competition and raise prices.  As alleged, Sutter Health made it very difficult for insurance companies to exclude Sutter Health providers from their insurance networks, or to place them in the lower tiers of their tiered networks, even when there were more cost-effective high-quality alternatives available.  As a result, Sutter Health providers faced little need to compete on price to be included in insurer networks or to be placed in the top tier, and thus were able to charge inflated prices, according to plaintiffs’ allegations.

This closely watched class action was joined by California’s Office of the Attorney General in March 2018.

The case name is: UFCW & Employers Benefit Trust v. Sutter Health, et al., Case No. CSG 14-538451, Superior Court of the State of California, City and County of San Francisco.